Protection spending is “growing everywhere” says Thales Worldwide CEO Pascale Sourisse, amid a worldwide increase within the arms trade spurred by geopolitical tensions.
Arms spending in 2024 reached an unprecedented $2.7 trillion in 2024, in accordance with the Stockholm Worldwide Peace Analysis Institute, a battle suppose tank. The identical suppose tank estimated that the world’s high 100 protection corporations raked in $679 billion in collective income, the very best quantity reported since SIPRI began monitoring the quantity in 2002.
“There is a very strong increase in defense spending in Europe, Asia, the Middle East, and in the Americas—it’s growing everywhere,” Sourisse, who can also be Thales’s senior vice chairman for worldwide improvement, advised Fortune on the sidelines of the Singapore Airshow.
That pushed the French firm, No. 190 on Fortune’s Europe 500, to “extensively” ramp up manufacturing. Sourisse cited radars for example: Thales has quadrupled its manufacturing of radars to cater to rising demand for air surveillance.
Unmanned plane—each the plane themselves, and methods to shoot them down—drove a lot of the dialog on the Singapore Airshow. Thales, Sourisse mentioned, is engaged on methods to “manage swarms of drones and solutions to counter drone attacks—what you would call Counter-Unmanned Aerial Systems, or C-UAS.”
Thales shares have risen by greater than 50% over the previous 12 months, as a part of a worldwide increase in protection shares as traders wager that geopolitical tensions and the return of armed battle in locations like Ukraine will drive demand for brand spanking new weapons and defenses.
Considerations concerning the reliability of the U.S. and its safety alliances are additionally pushing corporations to consider sourcing arms from different areas, together with Europe and East Asia. Protection corporations like Germany’s Rheinmetall, South Korea’s Hanwha Aerospace, Japan’s Mitsubishi Heavy Engineering and Singapore’s ST Engineering have all reported more-than-100% positive aspects in share value over the previous 12 months.
Civil aviation, avionics and AI
Past protection, Thales can also be a serious participant in avionics and civil aviation. The corporate is investing aggressively in AI-enabled flight programs to optimize flight paths and improve security.
Up to now, pilots might solely react to storm clouds as soon as onboard radars detected them. Sourisse defined that airways can now feed climate forecast information into Thales’s AI-enabled programs, permitting flight paths to be optimized proper after take-off.
AI additionally powers the corporate’s air visitors management programs, which might analyze forecasts to reduce delays at busy air hubs like Singapore’s Changi Airport. This reduces the time pilots spend within the air ready for a slot to land; Sourisse estimates that these instruments can minimize gas consumption by about 10%.
Airways might welcome these instruments amid a worldwide surge in journey. “Passenger traffic has already surpassed pre-COVID levels in key hubs like Singapore,” Sourisse mentioned. “You need to handle this growth without compromising safety or security.”
Thales’s cybersecurity arm has grown since its 2019 acquisition of Gemalto, a Dutch digital safety agency. Thales’s Singapore facility now produces greater than 200 million banking playing cards, 12 million id playing cards, and practically 10 million passport information pages yearly for purchasers worldwide. “Thales produces consumer-oriented products like these payment cards, which many have in their pockets and use—even without knowing who makes it,” Sourisse quipped.
Final week, Thales introduced that it was going to put money into new automated applied sciences in its Singapore plant, saying it was “fully aligned” with the nation’s ambition to be “a global hub for advanced, high-tech manufacturing.”
Transferring ahead, Sourisse sees the enterprise deepening its roots in Asia, citing Southeast Asia’s Indonesia, Malaysia and Vietnam, and East Asia’s China, Japan and South Korea as markets to look at.
Thales can also be increasing its presence in India, the place they at the moment have already got a crew of two,300 staff. “That is going to increase tremendously,” Sourisse says. “We have activities in many sectors in India, and very large engineering centers.”
Thales generated 15.3 billion euros ($18.1 billion) in income for the primary 9 months of 2025, an 8.4% year-on-year enhance. Virtually 80% of that income got here from what Thales deemed “mature markets”, particularly Europe, North America, Australia and New Zealand.
The protection enterprise generated 8.2 billion euros ($9.8 billion) in income, making up simply over half of the full. Rising at 14% year-on-year, it was additionally the quickest rising a part of Thales’s enterprise.
